Breaking News: 101 Deal Closes
The sale of 101communications officially closed this afternoon, two sources familiar with the deal said late Friday.
In the deal, the $53 million technology-publishing Chatsworth, California, company was sold by the private-equity firm Frontenac Co., to two other equity firms, Boston-based Nautic Partners and Alta Communications.
Nautic and Alta are joining with Neal Vitale, a magazine-industry veteran who has been a top executive at Petersen Publishing and Cahners Publishing Co., to form a new company called 1105 Media. Vitale will take over as CEO at 101communications and bring in his own management team, including a new CFO, one of the sources said.
The second source said that the new company headed by Vitale will be making a second acquisition "very soon."
The deal, delayed for at least four months past the expected completion, cleared review by the Federal Trade Commission under the Hart Scott Rodino Antitrust Act about a week ago, thus paving the way for a final closing.
Reports varied regarding the sale price, but it was put at somewhere between $73 million and $75 million. One source who saw the offering materials sources indicated that 101 produced $7.1 million in EBITDA in 2005, thus making the sale multiple either more than 10-times EBITDA on the actual performance, or more than nine-times after factoring in add-backs.
The Jordan, Edmiston Group handled the transaction.
In an internal memo to staff, obtained by FOLIO: Alert, outgoing CEO Jeff Klein said he will be staying on as chairman of the new company, serving in a non-executive, part-time role. He will retain an ownership stake in the company. Also leaving the company are Stu Coppens, Executive VP and CFO, Gordon Haight, Executive Vice President, and Sherry Katz, Senior VP and General Counsel.
In the memo, Klein described the wild ride 101communicatiions has experienced in its eight-year history: "We were formed at the end of 1998," he wrote. "In the first 22 months, we bought 10 companies, growing from three employees to more than 350. We built from scratch the basic infrastructure of a large-scale platform publishing company, by finding top quality people and putting new systems in place. It was an exciting and sometimes challenging time.
Then, just as we were poised to grow, disaster struck. Suddenly and without warning, the bottom fell out of the technology marketplace. In the fall of 2001, our very survival was at stake. We moved quickly and aggressively, but it wasn’t easy. With the support and encouragement of our primary owner, Frontenac, we restructured the company, both internally, and financially. We closed magazines, streamlined operations, and reduced staff by more than a third. A last-minute cash infusion from our shareholders and new debt arrangements provided the much-needed flexibility for us to survive. And, survive we did."
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